RI’s Tax Revenue Collapses in April — Personal Income Tax Collection Falls 66% Year Over Year
GoLocalProv News Team
RI’s Tax Revenue Collapses in April — Personal Income Tax Collection Falls 66% Year Over Year
The Rhode Island Department of Revenue today released its FY 2020 Cash Collections Report for April 2020, which saw dramatic losses in revenues across every category. While a decline in revenues was anticipated, this level was not.
As GoLocal first reported last week, in fiscal years 2020 and 2021 Rhode Island is already anticipating a near $900 million shortfall.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe falling revenues put even more pressure on Governor Gina Raimondo, Senate President Dominick Ruggerio and Speaker Nick Mattiello to quickly find budget options.
April in Focus
The April decreases are almost unfathomable, according to the Department of Revenue:
- Decreased April 2020 personal income tax cash collections of $152.0 million, 66.4% below April 2019.
- The sharp decrease in April 2020 personal income tax cash collections is due to a sizeable decrease in personal income tax estimated and final payments of $183.0 million, or ‑84.8%, due to the extension of the filing and payment due date to July 15, 2020, and a modest decrease in withholding payments of $5.2 million, or ‑5.2%. These declines were offset by decreased refunds and adjustments of $36.2 million, or ‑41.7%.
- Lower April 2020 sales and use tax cash collections of $11.4 million or ‑12.2% from April 2019 with modestly lower net taxation receipts of $4.0 million and sharply lower meal and beverage sales tax receipts of $5.4 million and motor vehicle use tax receipts of $7.7 million. All these measures were reduced by the halting of dine-in service at restaurants and bars and the stay-at-home order that were in place in March 2020.
- Total general business taxes for April are $42.9 million less than the same month last fiscal year, a decrease of 41.6%. This decrease was largely attributable to business corporation tax receipts, which were $22.1 million below April 2019, insurance company gross premiums tax cash collections, which were 28.0% below April 2019, financial institutions tax cash collections, which were $7.0 million lower in April 2020 than in April 2019, and public utilities gross earnings tax cash receipts, which fell $5.0 million below April 2019 cash collections. Each of these tax types was likely impacted by the postponement of the tax filing and payment deadline from April 15th to July 15th.
- Decreased cigarette and other tobacco products tax cash collections of $2.1 million, a variance of ‑18.1% and lower departmental receipts cash collections in April 2020 of $3.2 million, a variance of ‑12.5%.
- Lower receipts from the lottery transfer of $16.2 million, a decrease of 92.6 due to the indefinite closure of the state’s two state-operated casinos on March 14, 2020.
- Higher estate and transfer tax cash collections in April 2020 of $2.8 million, a variance of 237.9%, versus cash collection in April of 2019. The increased estate and transfer tax cash collections are unrelated to the COVID-19 pandemic as they reflect the settling of the estates of decedents who died nine months or more earlier.